For most of our clients who have minor children, if asked what matters most in life, they respond “our kids.” If you have minor children, would you agree with this? There’s something special about the relationship between a parent and his or her children—especially when they are minors. For that reason, it is crucial for you as a parent to take certain steps in order to protect your children in the event you pass away.
The first step is to legally address who will raise your children. The person who will do this is a “Guardian” appointed by a court. A Guardian is given essentially all powers necessary to raise and care for the children. The Guardian will decide where your children will live, how they will be raised, what they will be taught, and so. Obviously, the person who serves as Guardian will play a very important role in the lives of your children.
As a parent of minor children, you would want to be the one to pick who will raise your children. After all, if you don’t do it, a court will decide and the Judge making the decision will not know your children nor will the Judge know the person selected the way you do. In addition, the considerations you take into account for who should be Guardian may not be the same as those of a Judge. For example, you might want someone who has similar values as you do. But if a Judge decides who to appoint as Guardian, how will he or she know your values? Or will he emphasize values different than yours?
In most instances, the place where you as a parent will designate a Guardian is in your Last Will & Testament. A typical provision in a Will addressing this might read:
Upon my death, if any of my children are minors and if their other parent is not then-living or is not willing or able to act as Guardian, then I appoint my sister, Nancy, as Guardian of my minor children. If Nancy predeceases me or cannot serve as Guardian, then I appoint my brother, James, as the alternate Guardian of my then-minor children.
As you can see from this example, a primary person is designated along with an alternate. With minor children, it is particularly important to name at least one alternate. In fact, if your personal situation allows, there’s no harm in naming more than one alternate. After all, depending on the age of the children, the circumstances of the person designated as Guardian could change over the years, thereby making it necessary that an alternate serve instead.
The second step that you should take to protect your children is to structure things so that any money or assets you leave to your children can be managed for their benefit. In Florida, minor children cannot inherit directly more than $15,000. Any amount above that would require setting up a Guardianship of the Property for each child. This type of Guardianship is court-administered and it is expensive, cumbersome, and should be avoided.
A better way to manage and hold assets for the children is to establish a Revocable Trust (also called a Living Trust). In this instrument, you name a Trustee to oversee any money or assets which you leave to your children. No Guardianship of the Property is required and that keeps the court out of things. You can structure the Trust so that the needs of the children are met growing up. This is what is called a “HEMS” provision—standing for health, education, maintenance and support. Until the children reach an age which you designate, the Trustee can use the funds in the Trust for the children’s health, education, maintenance and support but the children do not get a lump sum of the money until the designated age.
Here’s an example of how this type of provision might read:
Upon my death, the Trust share of any beneficiary of this Trust shall be distributed outright if said beneficiary has reached age 25. If a beneficiary has not reached age 25 at the time for distribution then said beneficiary’s trust share shall be held in trust and shall be distributed to said beneficiary upon said beneficiary reaching age 25; Until a beneficiary under this Trust reaches age 25, the Trustee may use as much of the income and principal of said beneficiary’s trust share for the beneficiary’s health, education, maintenance and support, as the Trustee, in his or her sole and absolute discretion, determines is necessary or required.
Drafting a Last Will & Testament and a Trust are best done by an experienced estate planning attorney. Online programs, office supply packages, and other “do-it-yourself” estate documents are risky. They lack the drafting skill as well as the accompanying advice which an experienced attorney can give. With something as precious as your children at stake, certainly doing it the right way makes sense. If you have minor children, take these basic steps to protect them. If you do not have minor children but you know someone who does, pass this along…for their children’s sake.
